Hawaii Construction Bidding Process

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What is the Bid Process in Construction? 

The construction bidding process involves five steps: bid solicitation, bid submission, bid selection, contract formation, and project delivery. For a contractor in Hawaii to achieve success in the construction bidding process, you need to plan and improve in each of these areas. 

If you’re a new contractor or are looking to secure more bids more often, follow our guide below. 

What Should a Construction Bid Include? 

Successful construction bids generally contain the total cost of building the structure, including expenses for subcontractors, general contractors’ costs, overhead profit, and scope of work. A bid will also need to contain information such as company details, the date, a clear definition of the work, and a project name. Without all of these elements combined, you may not meet the necessary standards. 

How Do You Estimate a Construction Bid? 

An accurate estimate is not only vital for winning a bid but it can also determine which Hawaii Construction bonds you may need. A professional estimate will include: 

• Direct costs: This includes materials, labor, and equipment expenses tied directly to construction activities. 
• Indirect costs: Consider costs that don’t involve direct construction work, like permits, utilities, security, quality control, administration, and legal fees. 
• Labor hours: Wages paid to construction teams should be factored in, including potential overtime. 
• Subcontractor expenses: Don’t forget to calculate costs associated with hiring subcontractors for specialized tasks like plumbing, electrical work, or HVAC installation. 

What Are the Five Steps in the Process of Bidding? 

1. Bid Solicitation: This is when the project owner or general contractor invites contractors to submit bids. 
2. Bid Submission: Contractors prepare and submit their bids with all necessary details, such as pricing, scope of work, and deadlines. 
3. Bid Selection: The owner of the project will look over bids, including the contractor’s costs, qualifications, and the scope of work suggested. Based on this information, they will choose a bid they believe is best. 
4. Contract Formation: Once the project owner chooses a bid, they will set up a contract with the winning contractor. 
5. Project Delivery: At this phase, the contractor will begin work on the project and secure any further surety bonds they may need. 

What Licenses and Bonds Do You Need for Hawaii Construction Bidding? 

In Hawaii, contractors bidding on public construction projects must comply with specific licensing and bonding requirements established under state law. Generally, contractors must hold an appropriate Hawaii contractor’s license issued by the Department of Commerce and Consumer Affairs (DCCA) for the applicable classification of work, as well as a general excise tax license from the Department of Taxation. Depending on the scope of work, additional permits or professional registrations may be required. 

For most public works projects governed by the Hawaii Public Procurement Code, contractors are required to submit a bid bond ensuring they will honor their submitted bid terms if awarded the contract. Once selected, contractors typically must provide performance and payment bonds to protect the government entity and guarantee compensation for subcontractors, suppliers, and laborers. These bonding requirements are designed to promote fairness, accountability, and the prudent use of taxpayer funds in Hawaii’s procurement process. 

It’s imperative to work with a professional surety bond agency, like Surety Bond Professionals, that knows how to secure bonds successfully at the best price so you can submit a competitive bid. 

Common Mistakes Made While Bidding 

Even a well-prepared contractor can be rejected for a bid. Some common reasons this might happen are: 

• Incomplete documentation, such as proof of bonds and licenses. 
• Inaccurate cost estimates, where your estimate is much higher or lower than average. 
• Lack of experience, unproven track record. 
• Simple mistakes, like not following the guidelines for the bid strictly or missing paperwork. 
• Ambitious timelines, if your proposed timeline does not align with the average timelines submitted you may face rejection. 

State vs. Federal Bids? 

Understanding the difference between state and federal bids can help you stay compliant when you submit your bid. 

Topic	State	Federal
Procurement Laws and Regulations	State-specific procurement laws and regulations, varying by state.	Must comply with the Federal Acquisition Regulation, which is stricter and more rigorous.
Bonding Requirements	Often need state licensing and bonds like bid bonds and performance bonds.	Also needs bonds but is often required from a federally approved surety company.
Project Scope	Projects can range from small repairs to large public works in a specific area.	Contracts can be large-scale, spanning multiple states.
Set-Aside Programs	Some states have set-aside programs for small businesses, minority-owned, or veteran-owned businesses, but this varies.	The federal government has many set-aside programs for small businesses, veteran-owned, women-owned, and disadvantaged businesses through programs like 8(a) or HUBZone.
Competition	Often limited to nearby areas, reducing competition.	Open to contractors nationwide, increasing competition and opportunities.

Unique Aspects of the Hawaii Construction Bidding Process 

1. In Hawaii, most construction work requires an appropriate contractor’s license from the Department of Commerce and Consumer Affairs (DCCA). Contractors must also obtain a general excise tax (GET) license from the Department of Taxation. Depending on the nature of the work—such as electrical, plumbing, or HVAC—further licensure or specialized credentials may be needed from applicable professional boards or regulatory agencies. Additionally, local counties (City and County of Honolulu, Hawaii County, Maui County, and Kauai County) have their own permitting or registration requirements. Before commencing any project, contractors should verify and comply with all relevant state and local regulations. 
2. Construction in Hawaii must adhere to the Hawaii State Building Codes, which generally adopt and amend versions of the International Building Code (IBC) and the International Residential Code (IRC). Local amendments often address region-specific conditions, such as hurricane-force winds or coastal flood zones. In terms of energy efficiency, Hawaii references standards comparable to the International Energy Conservation Code (IECC) or similar guidelines to promote sustainability and reduce overall energy consumption. Contractors should confirm the current codes and amendments for each county before starting a project. 
3. Projects located near environmentally sensitive areas—such as coastlines, wetlands, or watersheds—may fall under the oversight of the Hawaiʻi Department of Land and Natural Resources (DLNR), the Hawaii Department of Health (DOH), or other state agencies. Depending on the project’s scope and potential environmental impact, additional permits, environmental assessments (pursuant to Hawaii Revised Statutes Chapter 343), or inspections may be required. Federal agencies, such as the U.S. Army Corps of Engineers, also maintain jurisdiction over activities affecting navigable waters and protected wetlands, necessitating compliance with federal regulations where applicable. 
4. Under Hawaii law, employers with one or more employees are generally required to carry workers’ compensation insurance, subject to limited exemptions. While the state does not mandate general liability insurance for all contractors, maintaining adequate coverage is strongly recommended and often required by project owners, lenders, or government agencies. This coverage helps protect contractors against financial risks stemming from accidents, property damage, or other liabilities and is commonly a prerequisite for securing project contracts. 
5. Hawaii’s public contracting procedures are governed by the Hawaii Public Procurement Code (Hawaii Revised Statutes Chapter 103D), which establishes competitive bidding requirements for publicly funded projects above certain monetary thresholds. This framework ensures transparency and cost-effectiveness in awarding contracts that utilize taxpayer funds. Contractors bidding on state or local government projects must meet qualification standards, follow prescribed bidding processes, and secure any required bid, performance, and payment bonds. Typically, contracts are awarded to the lowest responsible and responsive bidder, although factors such as relevant experience, qualifications, and adherence to project specifications may also influence the final award decision. 

Hawaii Bid Network 

In Hawaii, contractors and suppliers looking for bidding opportunities can utilize the Hawaii eProcurement System (HIePRO) and other state-managed platforms. These official resources offer a centralized listing of public procurement solicitations—including bid advertisements, Requests for Proposals (RFPs), Requests for Qualifications (RFQs), and Requests for Information (RFIs)—along with details on recent awards and bid results. These platforms function largely in a government-to-business (G2B) and business-to-business (B2B) capacity, aligning with the Hawaii Public Procurement Code (Hawaii Revised Statutes Chapter 103D) and related legal requirements that mandate fair and competitive bidding. 

Prospective bidders can monitor these portals for opportunities from state agencies, counties, and other public entities in need of qualified vendors. Each solicitation generally contains comprehensive project descriptions, submission specifications, and legal guidelines, thereby promoting transparency, fairness, and adherence to Hawaii’s public procurement regulations. As these platforms focus exclusively on G2B and B2B interactions, they do not facilitate business-to-consumer or consumer-to-consumer transactions. 

Succeed in the Hawaii Construction Bidding Process 

To succeed in the Hawaii construction bidding process, you need accurate estimates and documentation as well as a solid grasp of the requirements and nuances of state vs federal bids. 

However, one of the most important components of your bid is securing the right surety bonds, such as bid bonds, performance bonds, and payment bonds. When you choose a reliable surety bond agency, you can feel confident that your bond will meet all legal and regulatory requirements. At Surety Bond Professionals, we know the challenges you may face and are here to support you with all your bond needs. Contact us today for a quote. 

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